A recessionary expenditure gap exists if
A)planned investment exceeds saving at the full-employment GDP.
B)the aggregate expenditures schedule lies below the 45-degree line at the full-employment GDP.
C)the aggregate expenditures schedule intersects the 45-degree line at any level of GDP.
D)the aggregate expenditures schedule lies above the 45-degree line at the full-employment GDP.

Question

Quizplus · Accepted Answer

A recessionary expenditure gap occurs when aggregate expenditures are less than the full-employment GDP, which is represented by the aggregate expenditures schedule lying below the 45-degree line at the full-employment GDP.

A Recessionary Expenditure Gap Exists If